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Ukraine

Transpartent Budget System (UA0063)

Overview

At-a-Glance

Action Plan: Ukraine Third National Action Plan 2016-2018

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: Ministry of Finance

Support Institution(s): Eidos Centre for Political Studies and Analysis non-governmental organisation, other civil society institutions and international organisations (by consent).

Policy Areas

IRM Review

IRM Report: Ukraine Mid-Term Report 2016-2018

Starred: No

Early Results: Marginal Marginal

Design i

Verifiable: No

Relevant to OGP Values: Access to Information Technology

Potential Impact:

Implementation i

Completion:

Description

Event: Implementation of the first stage in the development of the integrated “Transparent budget” information and analysis system.; Implementation timeframe: 2016-2017; Entities responsible: Ministry of Finance; Partners: Eidos Centre for Political Studies and Analysis non-governmental organisation, other civil society institutions and international organisations (by consent).; Expected results: Ensuring the: Development of technical specifications for the development of the “Transparent budget” system (June 2017). Development and trial operation of a “Budget for the citizens” subsystem (December 2017).

IRM Midterm Status Summary

3. Ensure the filing and publication of e-declarations

Commitment Text:

Introduction of the system for filing and publication of declarations of entities authorized to perform the functions of national or local government, in accordance with the Law of Ukraine 'On the prevention of corruption.'

Expected results: Filing of declarations of the subjects to be declared as specified in article 3 of the Law of Ukraine 'On the prevention of corruption.'

Responsible institutions: National Agency for the Prevention of Corruption, State Special Communication Service.

Supporting institutions: Draft of the UN Development Program in Ukraine 'Enhanced Public Sector Transparency and Integrity', Transparency International Ukraine non-governmental organization, other civil society institutions and international organizations (by consent).

Start date: December 2016 End date: July 2018

Context and Objectives

During the previous action plan, the government created an open access unified web portal of civil servants’ declarations of income, property, and expenditures.[Note143: 'Report on Implementation of the Action Plan for Introduction of the Open Government Partnership Initiative in 2014–2015,' Open Government Partnership, https://www.opengovpartnership.org/sites/default/files/Ukraine_End-Term_Self-Assessment-Report_2014-16_EN.pdf. ] This commitment aims to introduce a system for filing and publicizing declarations of individuals authorized to perform the functions of national or local government. Such action would be in accordance with the law 'On the Prevention of Corruption.'[Note144: 'The Law of Ukraine ‘On the Prevention of Corruption,’' The Verkhovna Rada of Ukraine: The Official Web-Portal, http://zakon2.rada.gov.ua/laws/show/1700-18.] The government will implement the commitment by mandating annual filing of declarations regarding personal and family property as well as gifts received.[Note145: Philip Fluri and Valentyn Badrak, Anti-Corruption Measures in Ukraine after the Revolution of Dignity: Key Legislative Aspects (Geneva-Kyiv: Geneva Center for the Democratic Control of Armed Forces, 2016), https://www.dcaf.ch/sites/default/files/publications/documents/DCAF_CACDS_Anti-Corruption_Laws_ENG_2016.pdf.]

This commitment is highly specific, as it refers to a particular article in the law regulating who should submit e-declarations, how, and when. The resulting e-declarations database (registry) intends to establish a clear baseline for comparison with previous paper declarations and future annual e-declarations. In accordance with the law, officials can be prosecuted if their declared incomes, assets, or expenses contradict their formal sources of incomes or observed consumption. Additionally, by publishing the registry of e-declarations online in an open data format, the government will greatly increase transparency. Therefore, this commitment could enhance access to information about the assets of public officials.

Declarants are obliged by law to submit their e-declarations by a deadline dependent on their position. These declarations become publicly visible online and can be accessed by interested citizens, civil society groups, and journalists. The National Agency on Corruption Prevention (NACP) checks the incomes, assets, and lifestyle patterns of declarants. If it finds violations, the National Anti-Corruption Bureau of Ukraine (NABU) opens a case.

The law specifies which public officials should declare and which agencies should check officials’ information and prosecute violations. According to new regulations, e-declarations extend the scope of items that must be declared, including cash, luxury goods, and expenses. This reflects a much wider selection of objects of formal declaration than had been required in the past.[Note146: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.] In addition, monitoring mechanisms have changed. The NACP checks e-declarations, the NABU starts investigations, and the National Police checks and controls officials at the local level. Importantly, the digital nature of the filing process and its immediate online publication make it more difficult to falsify or 'lose' such records. They can be immediately and easily downloaded by interested parties. For these reasons, ensuring such filing of declarations represents one step forward in making the e-declarations system more transparent and accountable. However, the system is not linked with existing electronic databases, such as cadastral. It is also manually checked by different authorities and has challenges in introducing sanctions. In addition, this commitment had already started prior to the adoption of the action plan. Consequently, the potential impact of this commitment is minor.

Completion

Overall, despite a number of challenges, the commitment is completed. The NACP launched the unified e-declarations registry on time. The first wave of e-declarations opened on 1 September 2016, and the second wave opened on 1 January 2017. Although the NACP reports 100 percent form completion, it notes that significant updates had to take place.[Note147: Ihor Tkachenko (National Agency for the Prevention of Corruption), interview by IRM researcher, 4 September 2017.]

Civil society experts point out several delays and challenges. First, the NACP planned to launch the first wave of e-declaration on 15 August 2016. By then, it was functional but lacked a cybersecurity certificate, so the NACP postponed the launch until 1 September 2016. It then still faced technical problems.[Note148: Ivan Presniakov (United Nations Development Program in Ukraine), interview by IRM researcher, 28 July 2017.] Second, around 90 percent of those who were obliged to declare their assets did so in the first wave. The second wave was postponed from 1 April until 1 May 2017.[Note149: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.]

According to the NACP, by 1 July 2017, as many as 1,127,588 original e-declarations were filed. Of those, 153,181 needed corrections. Additionally, 13,701 notices of real estate ownership were changed from prior declarations.[Note150: 'The Interim Report on the Realization of the Action Plan for the Implementation of the Open Government Partnership Initiative in 2016–2018,' Civil Society and Authorities: Governmental Website, accessed 13 September 2017, (link no longer accessible as of 25 April 2018) http://civic.kmu.gov.ua/consult_mvc_kmu/uploads/attach-3467-910681586.doc. ]

The NACP launched the IT system of the unified e-declarations registry on 1 September 2016. Since then, it made the respective public registry available online in an open data format.[Note151: Ihor Tkachenko (National Agency for the Prevention of Corruption), interview by IRM researcher, 4 September 2017.] Indeed, the registry is working online.[Note152: 'The Unified e-declarations Registry,' National Agency for the Prevention of Corruption, https://portal.nazk.gov.ua/login.] However, the United Nations Development Programme representative admits that the sustainability of the system is under question. It has been overloaded on multiple occasions due to excessive usage.[Note153: Ivan Presniakov (United Nations Development Program in Ukraine), interview by IRM researcher, 28 July 2017.] Civil society activists consistently back up the registry by copying the data and performing independent monitoring.[Note154: The online project Declarations. For more information, visit https://declarations.com.ua/.]

Notably, the special status of state security agencies prevents online publication of declarations of their officers. These agencies include the Security Service of Ukraine and the General Prosecutor’s Office. Some argue that this allows suspicious declarations to go undiscovered, especially among judges and the heads of state-owned companies.[Note155: Vitalii Shabunin (Anti-Corruption Action Center), interview by IRM researcher, 27 July 2017.]

Early Results

The functioning of the current system of e-declarations serves as a notable. It provides a starting point to identify unexplained wealth and the data to better prosecute corrupt officials.[Note156: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.]

The NACP has adopted a new regulation for the verification of declarations. In May 2017, it also adopted guidelines for monitoring declarants' lifestyles.[Note157: 'The Interim Report on the Realization of the Action Plan for the Implementation of the Open Government Partnership Initiative in 2016–2018,' Civil Society and Authorities: Governmental Website, accessed 13 September 2017, (link no longer accessible as of 25 April 2018) http://civic.kmu.gov.ua/consult_mvc_kmu/uploads/attach-3467-910681586.doc. ] The NACP states that in addition to publicly condemning corrupt actions, it has started 300 financial checks of submitted e-declarations.[Note158: Ihor Tkachenko (National Agency for the Prevention of Corruption), interview by IRM researcher, 4 September 2017.]

Civil society remains more suspicious of progress. One key problem is that the NACP has not yet provided a high-quality check that led to criminal prosecution. Additionally, relations between the NACP and the National Anti-Corruption Bureau (NABU) do not seem to be fully functional. The NACP prevented the NABU from full access to the e-declarations database (regarding real estate addresses and vehicle registration numbers).[Note159: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.] By the end of October 2016, the NACP had started 524 full checks, 81 of which it has completed. It has found only seven cases of e-declarations with incorrect data and has found no declarations with indications of illegal enrichment.[Note160: 'NACP Has Not Identified E-declarations with Indications of Illegal Enrichment,' Economic Pravda, 1 November 2017, http://www.epravda.com.ua/news/2017/11/1/630693/.] Some criticize NABU’s slow progress. It has investigated 66 cases and opened one criminal case.[Note161: 'Investigations of NACB Detectives Based on E-declarations Analysis,' National Anti-Corruption Bureau of Ukraine, 21 July 2017, https://nabu.gov.ua/en/infographics/rozsliduvannya-detektiviv-nabu-za-rezultatami-analizu-e-deklaraciy-stanom-na-30062017.] At the same time, the public perceives that courts are major bottlenecks in prosecuting anti-corruption cases.[Note162: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.]

Civil society representatives note the lack of leadership, low bureaucratic work ethic,[Note163: Vitalii Shabunin (Anti-Corruption Action Center), interview by IRM researcher, 27 July 2017.] and reticence to act on suspicious declarations.[Note164: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.] Current regulations are also imperfect. An EU Anti-Corruption Initiative (EUACI) audit of the NACP business processes found that these processes could be improved by eliminating external obstacles. In particular, the EUACI suggests granting the NACP access to public registries Such access is necessary for conducting checks and improving the procedure of the full declarations check.[Note165: 'The Report on the Results of Analysis of Business Processes of Completed E-declarations Check Has Been Presented at NACP,' National Agency for the Prevention of Corruption, 5 October 2017, https://nazk.gov.ua/news/v-nazk-prezentovano-zvit-z-rezultatamy-analizu-biznes-procesiv-povnoyi-perevirky-e-deklaraciy.] Overall, it is evident that, due to a number of obstacles, a full-scale systemic anti-corruption work, based on e-declarations checks, has not yet begun.

Meanwhile, it is worth mentioning that the e-declaration has gained a lot of traction. Since the introduction of the system, some officials have officially divorced their partners or transferred assets to them.[Note166: Yaroslav Yurchyshyn (Transparency International Ukraine), interview by IRM researcher, 19 July 2017.] Others have filed humorous items, trying to make fun of the system.[Note167: Ivan Presniakov (United Nations Development Program in Ukraine), interview by IRM researcher, 28 July 2017.] For civil society, many consider an independent project entitled 'Declarations' to be more popular than the official NACP website. Declarations has a more user-centered design and analytical tools, as well as both digital and paper declarations.[Note168: Ivan Presniakov (United Nations Development Program in Ukraine), interview by IRM researcher, 28 July 2017.] Stored on a server, Declarations also serves as a backup version of the NACP e-declarations database.

In March 2017, Parliament adopted amendments to the law on anti-corruption.[Note169: 'The Draft Law on Amendments to the Article 3 of the Law of Ukraine ‘On the Prevention of Corruption,’' The Verkhovna Rada of Ukraine: The Official Web-Portal, http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61314.] These amendments have made the leaders of civil society organizations and their contractors additional subjects of e-declarations. Such amendments are contrary to the original design of the law. This move is perceived as fiscal authorities’ efforts to pressure civil society.[Note170: Nastia Korinovska, 'The Changes to the Tax Code Contain Risks of Pressure on Civil Society Organizations—RPR,' Hromadske, 11 July 2017, https://hromadske.ua/posts/u-zminakh-do-podatkovoho-kodeksu-ie-ryzyk-tysku-na-hromadski-orhanizatsii-rpr.]

Next Steps

The introduction of an e-declaration system is a critical reform in the fight against corruption. However, for it to be an effective anti-corruption tool, the system needs to allow for the comparison of annual declarations over time. An automated system of verification ensures that information on over a million declarants is properly checked. The NACP needs to check declarations through automated procedures and identify violations of the law when public officials do not declare owned assets.

The IRM researcher recommends the following actions be introduced in the remaining time of this action plan, or otherwise carried forward to the subsequent plan.

· The NACP and the National Anti-Corruption Bureau could utilize the system of verification of e-declarations using an automation software such as land cadastre. This would allow them to check the e-declarations database, and it would link with other existing databases on property and income. The IRM researcher also suggests integrating the responsibilities between the agencies so that both of them can conduct an automatic check of e-declarations.

· According to the EU Anti-Corruption Initiative’s recommendations, the NACP should be authorized to make its own decisions on procedures and methods of checking declarations. It should not need to register these decisions with the Ministry of Justice.[Note171: 'The Report on the Results of Analysis of Business Processes of Completed E-declarations Check Has Been Presented at NACP,' National Agency for the Prevention of Corruption, 5 October 2017, https://nazk.gov.ua/news/v-nazk-prezentovano-zvit-z-rezultatamy-analizu-biznes-procesiv-povnoyi-perevirky-e-deklaraciy.]

· A final recommendation, informed by requests from Ukrainian civil society and the international community, is for Parliament to abolish recent amendments that require civil society activists to submit e-declarations and make them potential subjects of administrative and criminal prosecution.


Ukraine's Commitments

  1. Infrastructure data portal

    UA0070, 2018, E-Government

  2. open standard for e-system

    UA0071, 2018, E-Government

  3. Ensuring openness and transparency of selling public assets and property

    UA0072, 2018, E-Government

  4. Transparency in public procurement (Prozorro)

    UA0073, 2018, E-Government

  5. Awarenss raising about social and economic development

    UA0074, 2018, Aid

  6. e-calls for proposals to support CSOs

    UA0075, 2018, Civic Space

  7. Beneficial ownership registry

    UA0076, 2018, Beneficial Ownership

  8. Anti-corruption Training

    UA0077, 2018, Anti-Corruption Institutions

  9. Publishing environmental information

    UA0078, 2018, E-Government

  10. Database of natural resources

    UA0079, 2018, E-Government

  11. Interactive map of mines

    UA0080, 2018, E-Government

  12. Priority electronic services

    UA0081, 2018, Citizenship and Immigration

  13. online platform for executive bodies and CSOs

    UA0082, 2018, Civic Space

  14. EITI online data

    UA0083, 2018, E-Government

  15. electronic resources for education

    UA0084, 2018, E-Government

  16. online verification of education certificates

    UA0085, 2018, E-Government

  17. Free access to national repository for academic texts

    UA0086, 2018, E-Government

  18. Administrative Service Decentrilisation and Improvement

    UA0057, 2016, Capacity Building

  19. United State Portal Extension; Electronic Government Information Services Unification; Modern Tools for Electronic Identification

    UA0058, 2016, Capacity Building

  20. System for Entities Performing Government Functions

    UA0059, 2016, Capacity Building

  21. Free Urban Planning Documentation

    UA0060, 2016, E-Government

  22. Beneficial Ownership Verification System

    UA0061, 2016, Beneficial Ownership

  23. CoST Beneficial Ownership Standards

    UA0062, 2016, E-Government

  24. Transpartent Budget System

    UA0063, 2016,

  25. Starred commitment Open Public Procurement

    UA0064, 2016, Capacity Building

  26. Starred commitment Extractive Industries Transparency Initiative

    UA0065, 2016, Extractive Industries

  27. Environmental Public Monitoring

    UA0066, 2016, Environment and Climate

  28. Community Policing System

    UA0067, 2016, Education

  29. Draft Law on Public Consultations

    UA0068, 2016, Legislation & Regulation

  30. Development of E-democracy.

    UA0069, 2016,

  31. Improve government rules on CSO involvement

    UA0031, 2014, E-Government

  32. Financing of charities

    UA0032, 2014, Civic Space

  33. Not-for-profit status for CSOs

    UA0033, 2014, Civic Space

  34. Public participation law

    UA0034, 2014, E-Government

  35. Establishing Rules on Processing Official Information

    UA0035, 2014, E-Government

  36. Access to Urban Planning Documents

    UA0036, 2014, E-Government

  37. Starred commitment Access to Communist-Era Archives

    UA0037, 2014, Legislation & Regulation

  38. Starred commitment Draft law on open data

    UA0038, 2014, Legislation & Regulation

  39. Starred commitment Supervisory mechanism for the right to information

    UA0039, 2014, Legislation & Regulation

  40. Compliance with EITI

    UA0040, 2014, Extractive Industries

  41. Monitoring of infrastructure projects

    UA0041, 2014, Anti-Corruption Institutions

  42. Adopt regional anti-corruption programmes

    UA0042, 2014, Anti-Corruption Institutions

  43. Corruption risk assessment methodology

    UA0043, 2014, Anti-Corruption Institutions

  44. Starred commitment Asset disclosure on a single web portal

    UA0044, 2014, Asset Disclosure

  45. Law on administrative procedure

    UA0045, 2014, Legislation & Regulation

  46. Law on streamlining payment of administrative fees

    UA0046, 2014, E-Government

  47. Administrative services portal

    UA0047, 2014, E-Government

  48. Draft law on decentralisation of administrative services

    UA0048, 2014, Legislation & Regulation

  49. Draft law on social services

    UA0049, 2014, E-Government

  50. e-Government laws

    UA0050, 2014, E-Government

  51. Electronic readiness assessment

    UA0051, 2014, E-Government

  52. Government regulations on open data

    UA0052, 2014, E-Government

  53. Electronic democracy development roadmap

    UA0053, 2014, E-Government

  54. Open budget initiatives

    UA0054, 2014, E-Government

  55. e-Petitions

    UA0055, 2014, E-Government

  56. e-Governance training for local government

    UA0056, 2014, Capacity Building

  57. Laws on public participation

    UA0001, 2012, Civic Space

  58. Amendments to the law on community associations

    UA0002, 2012, Civic Space

  59. Amendments to resolutions on collaboration with civil society

    UA0003, 2012, E-Government

  60. Training for public servants on consultations

    UA0004, 2012, Capacity Building

  61. Harmonisation of access to information laws

    UA0005, 2012, E-Government

  62. By-laws on access to information

    UA0006, 2012, Legislation & Regulation

  63. Guidelines for classifying data

    UA0007, 2012, Public Participation

  64. Public information recording systems

    UA0008, 2012, Records Management

  65. Law on public broadcasting

    UA0009, 2012, Civic Space

  66. Public access to information in state registers

    UA0010, 2012, E-Government

  67. Starred commitment Extractive Industries Transparency Initiative

    UA0011, 2012, E-Government

  68. Law for controlling declarations of public servants

    UA0012, 2012, Asset Disclosure

  69. Public declarations of officials’ assets

    UA0013, 2012, Asset Disclosure

  70. Guidelines on conflicts of interest

    UA0014, 2012, Conflicts of Interest

  71. Updated anti-corruption laws

    UA0015, 2012, E-Government

  72. Regional anti-corruption programmes

    UA0016, 2012, E-Government

  73. Law on competitive e-government procurement

    UA0017, 2012, E-Government

  74. Starred commitment Administrative services reforms

    UA0018, 2012, E-Government

  75. Electronic access to administrative services

    UA0019, 2012, E-Government

  76. Governmental web portal of administrative services

    UA0020, 2012, E-Government

  77. Administrative services in a digital format

    UA0021, 2012,

  78. Starred commitment Regional administrative service centres

    UA0022, 2012, Public Service Delivery

  79. Programme for promotion of e-government

    UA0023, 2012, E-Government

  80. Electronic collaboration between executive agencies

    UA0024, 2012,

  81. Web-based petitions system

    UA0025, 2012,

  82. One stop shop for e-Reporting

    UA0026, 2012, E-Government

  83. E-region pilot project

    UA0027, 2012, E-Government

  84. Network of e-government practitioners

    UA0028, 2012, Public Participation

  85. Public libraries as bridges towards e-governance

    UA0029, 2012, E-Government

  86. E-government knowledge management portal

    UA0030, 2012,